Why Krispy Kreme Stock Won't Come Back From Its Last IPO Disaster

IPO stock photo | by lendingmemo_com

A Krispy Kreme IPO could be on the way… again. But Krispy Kreme failed as a public stock before. In the event that Krispy Kreme returns to the New York Stock Exchange, here's what we think of second chances.

We do not know much at this moment, since the company said it filed confidentially with the U.S. Securities and Exchange Commission earlier this month, May 4. We do, however, know enough about this company's first go-around to make our own judgment call.

Its first public offering was in the year 2000. Not long after, the donut company had to file for bankruptcy and was taken private.

Now, the $167 billion capital market in 2020 has enticed Krispy Kreme to go for it again.

Here's why that makes Krispy Kreme hard to recommend. Could there be a right time to buy?

What Is Krispy Kreme Up To?

You probably know Krispy Kreme as an infamous American donut company. It was founded all the way back in 1937 in North Carolina. Since then, it's become a massive chain of more than 1,000 stores worldwide. Krispy Kreme sells its donuts in 12,000 grocery and convenience stores as well.

The company ran into some trouble in the early 2000s, following sales drops and revisions to financial statements that led to investigations into its accounting practices.

This all led to the company going bankrupt. Luckily, JAB Holding Co. swooped in with $1.35 billion to buy Krispy Kreme in 2016. JAB was private, and it took Krispy Kreme private in the buyout as well.

After a record-setting IPO year and some revenue success, Krispy Kreme wants in.

For 2020, the company also saw customers increase as snacks and sweets came in demand during the COVID-19 lockdowns. To capitalize on its "stay-at-home stock" status, Krispy Kreme went even further and offered anyone with a valid COVID-19 vaccination card a free glazed donut.

But if you were around in the early 2000s, Krispy Kreme stock is a tough sell, no matter how charming it comes across. Here's why.

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Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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